Bank of England director Adam – Posen (Adam Posen) said on Tuesday, the bank may need to expand the size of bond purchase program up to 100 billion pounds (about $ 158 billion) to the UK to support the economic recovery process .
Posen said in a speech today: “We should be in the next three years on the secondary market to buy at least 50 billion pounds (about $ 79 billion) debt, mainly tend to buy long term the national debt. In view of the future situation is likely to be due to external developments is expected to become worse, I propose a more ‘quantitative easing’ measures, the amount should be 750 million pounds (about 118.5 billion U.S. dollars), or 100 billion pounds. “
in last week’s monetary policy meeting, the director of the Bank of England resisted pressure to expand the economic stimulus measures, because its trying to accelerate the rise in the inflation rate and slow economic growth strike a balance between the recovery process. Posen from 201 010 copies have been voted to take more stimulus measures, today, he also proposed the creation of a new public body, whose role is to provide loans to businesses. He pointed out that British companies are facing “financial pressure” and the retail banking industry is in “excessive concentration” of the state.
Posen said: “Recently, the United Kingdom and other countries, the bank’s credit default swap spread increased, which will make the future a serious tightening of credit conditions. “He said:” I will recommend the Government to establish two new public institutions, small and medium sized companies by increasing the availability of credit investment gap to solve the problem. One of the public banks or institutions responsible for providing loans to small and medium sized companies; the other one will be an entity responsible for bundling and securitization of loans to small and medium sized companies. Fundamentally, we need Fannie Mae and Freddie Mac as institutions, to create a non-liquid securities are more liquid and deep market. “
credit default swaps is derived from the credit card out of a financial derivatives, can be seen as a financial asset of default insurance, creditor debt risk by selling this contract, contract price is premium. Purchase of credit default insurance, the party known as the buyer, the risk of one party is called the seller. If both sides agree there is no event of default of financial assets, the buyer to the seller pays a regular “insurance”, and in the event of breach of contract, the seller the buyer’s loss of assets.
made the remarks in Posen, the pound fell against the U.S. dollar is still in the trend, had previously fallen to the lowest level in eight years.
Tags: Bank of England Posen: or bonds to buy scale will be $ 158 billion, the Bank of England
made the remarks in Posen, the pound fell against the U.S. dollar is still in the trend, had previously fallen to the lowest level in eight years.